Obama looks back to the Windy City for reshuffle

(AP)

Barack Obama was last night putting the final touches to a grand reshuffle of top aides, possibly including his chief of staff, which is likely to reinforce links both to his political base in Chicago and the Clinton White House.

Touching down at Andrews Air Force Base after a holiday in Hawaii, Mr Obama found Washington DC consumed by speculation as to his intentions, with most observers expecting to see him make significant changes to his inner circle of advisers within days.

They would come as the President begins the second half of his first term and faces new realities on Capitol Hill, with the Republicans again in charge of the House of Representatives.

Aides confirmed reports that Mr Obama has been in discussions with William Daley, the scion of Chicago's fabled political clan and former commerce secretary under Mr Clinton, about possibly taking over as his chief of staff. The appointment of Mr Daley, a centrist who is a top executive at JP Morgan Chase Bank, would send a strong signal to Republicans that Mr Obama is serious about bipartisan co-operation.

If the choice of 62-year-old Mr Daley as chief of staff or to any other top post is confirmed, it would prompt familiar complaints from critics that Mr Obama has brought the "Chicago Machine" – famed for pragmatism as much as for toughness – into the Oval office. The degrees of separation between Mr Obama and Chicago are few. Mr Daley is the son of the late Richard J Daley, the legendary Mayor of the Windy City. His brother, Richard M Daley, is the current mayor, who has announced he would not seek re-election, opening the door to Rahm Emanuel – Mr Obama's first chief of staff – to campaign for the job.

The web is wider than that. Valerie Jarrett is another old Chicago political hack and Obama family friend, who is likely to stay as a top adviser.

David Axelrod, another political counsellor of Chicago stock, is slated to leave the White House in February to begin Mr Obama's re-election effort. That will be based not in Washington but Chicago. Since Mr Emanuel decamped last autumn to launch his mayoral campaign, Peter Rouse, an aide from Mr Obama's Senate days, has been the interim chief of staff. Suited to the shadows, Mr Rouse may not object to handing the spotlight to Mr Daley.

The Daley name will surprise few in Washington. But it is intriguing. His inclusion in the White House team would allow Mr Obama to repair bridges with the business community, which has felt neglected since he took office. It might also bolster the impression that in the next two years, Mr Obama will be even more inclined to tack towards the centre and listen even less to his liberal base.

Liberal disgust would be loud. Mr Daley championed the passage of the North American Free Trade Agreement under Mr Clinton in the face of fierce union opposition and last year famously chided Mr Obama for pursuing healthcare reform. "They miscalculated on healthcare," he told The New York Times. "The election of '08 sent a message that, after 30 years of centre-right governing, we had moved to centre left – not left." Also drawing comment is the growing willingness of Mr Obama to draw from the Clinton well. And there is speculation that he is preparing to name Gene Sperling to replace Larry Summers as his National Economic Council director. Sperling had the job in the second Clinton term. The other possible candidate is Wall Street veteran Roger Altman, also an old Clinton hand.

On Air Force One yesterday, Mr Obama emphasised bipartisanship. "You know, I think there's going to be politics. That's what happens in Washington," he told reporters flying with him.

"They are going to play to their base for a certain period of time. But I'm pretty confident that they're going to recognise that our job is to govern."

The job of cajoling Republican leaders, who will formally take control of the lower chamber today, would fall traditionally to the chief of staff.

As a free-trade advocate and a successful banking executive, Mr Daley would seem to possess the kinds of credentials conservatives appreciate.

Other changes could include a move for Robert Gibbs, the chief spokesman, either away from the podium at the daily briefings or beyond the White House.

Mr Axelrod's likely replacement is David Plouffe, the vaunted campaign manager for Mr Obama in 2008.